Jelgava County Council cancels decisions on the sale of capital shares of “Zemgale Health Center” – ZZ.lv

With the votes of 14 members “for”, the Jelgava County Council decided today to cancel the decision taken last March on the termination of the participation in SIA “Zemgales sehyans centrs” (ZVC) and the decision taken in October on the sale of capital shares of the center, the LETA agency was informed in the municipality.

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The Jelgava County Council has decided to stop the process of expropriation of capital shares of the capital company and to conduct an audit of the utility and legality of ZVC costs for the period from January 1, 2021.

The municipality justifies its decision by the fact that it received letters from the National Health Service, the Latvian Hospital Association and the municipality of Jelgava city with a request not to allow “the sale of a stable, financially successful and development-oriented health care company to third parties, which could significantly affect the provision of quality health services For the residents of Jelgava and all of Zemgale”.

Also, the municipality has received objections regarding the legality of the delegation of autonomous functions of the Jelgava County Council to the company “Capital Management Systems” on December 30, 2003.

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This has made it necessary to review the possibilities of the local government at the moment to objectively and balancedly direct the process for the expropriation of the capital shares, according to the statement of the local government.

The municipality notes that the conditions for expropriation of ZVC’s capital shares are also on the agenda of council members for half a year. In fulfilling the decision of October of last year and starting the process of expropriation of capital shares, the local government is said to have relied on the Law on the Prevention of Waste of Public Person’s Financial Funds and Property to deal with the funds and property of a public person effectively, determining that the property should be expropriated at the highest possible price. Consequently, the municipality has taken steps for the process of expropriation of the capital share, initially anticipating an auction.

The municipality reminds that, when considering the issue of the sale of capital shares of ZVC, in October 2023, the city council approved the sale price of 2.5 million euros, based on the evaluation of SIA “Interbaltija”. “However, together with the debate about the most legally correct tactic – to sell at auction or through the right of first refusal, the accusations of the members were also taken into account, that the evaluation includes the information provided by the manager of the capital company “Capital management system” and this evaluation is not the most objective possible, apparently seeing the value of the capital company as higher,” it says. in the announcement of the council. Currently, the municipality has ordered another evaluation, based on the data and financial indicators provided by the temporary board appointed to the board of the capital company.

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This year, on March 26, an extraordinary meeting of ZVC members took place, where the management of ZVC was changed. The representatives of the municipality were appointed as members of the temporary board for the time being, while the process of expropriation of the company’s capital shares takes place – the acting head of the Property Administration of Jelgava region, Vaiva Laimīti, and the deputy head of the Legal Department, Svetlana Krūmiņa.

The Deputy Executive Director of Jelgava County Council Kaspars Sniedzītis explains that in the debate of many considerations, Jelgava County Council sees the possibility of continuing the expropriation of capital shares of the capital company as problematic, and with today’s decision canceled the previously adopted decisions in order to continue managing the capital company, to organize an audit of the company’s operations for the past three years.

Sniedzītis emphasizes that the company will continue to provide medical services, while the municipality first needs to organize an audit of the capital company, as well as in the near future, search for permanent board members in order to continue the successful economic activity of the ZVC with greater supervision and involvement of the municipality.

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Today, at the meeting of the Finance Committee, the deputies examined the draft decision on the possible payment of dividends and the amount for the annual profit of the ZVC reporting period in 2023. The company’s annual report was submitted to the municipality in March, while its approval is planned at the meeting of the company’s members on April 29. The Finance Committee did not support the draft decision on the possible payment of dividends, while today at the council meeting it voted from the agenda, taking into account the cancellation of the draft decision on the expropriation of capital shares, the municipality informs.

As reported, in the spring of 2023, SIA “CSE COE” and the Competition Council evaluated the tasks delegated by the municipality in the context of ZVC with the services provided in the field of health care, recommending to maintain direct participation until the end of the Concession Agreement and then expropriate the capital shares.

At the meeting of October 25, 2023, the Jelgava County Council decided to try to sell its capital shares of SIA “Zemgales sevysans centrs” at an auction.

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The municipality owns the largest part – 88.19% – of the capital shares of the center, while the owner of 11.81% of the capital shares is “Capital Management Systems”.

LETA already wrote that the audited report of ZVC received on March 18 confirmed that last year the board ensured the operation of the company with a turnover of 5.47 million euros per year, with undistributed profit of 155,000 euros and a cash balance of 1.17 million euros.

Photo: from the archive